PG&E Delivers On Promise Of Smart Meters

Pacific Gas & Electric analyzes new information from meters to better cope with times of peak energy usage. One of eight profiles of InformationWeek Elite 100 Business Innovation Award winners.

Pacific Gas & Electric is the first California utility and the largest US utility to install smart meters in its customers' homes, 9.4 million of them, in a program that's been seven years in the making. It now captures four readings an hour from each customer instead of the standard one a month.

PG&E's new analytics effort helps balance peak demand at substations.

The meters, in fact, are capable of taking 12 readings a minute, 720 an hour, but even collecting data every 15 minutes has been enough to set teeth on edge among homeowners in the San Francisco Bay Area. Demonstrators in Marin County, fearing an invasion of their privacy, blocked installation truck.

Smart meters capture how much energy is being consumed at each site and broadcast that data over radio frequency to a PG&E neighborhood area network, which reports to a central datacenter. The meters aren't so smart that they know which types of home devices are consuming energy or how much energy is going to each. What they collect is raw usage data. Even so, PG&E is collecting a lot of information that it's never had before, and that information is changing how it runs its business.

All those smart meters feed 2 TB of data a month into a new Teradata Data Warehouse Appliance 2700. Using the Teradata Utility Analytics software that came with the appliance, PG&E has launched a service, called PG&E Interval Data Analytics, that has begun to break down the walls among groups that generate energy in PG&E plants, those that buy energy off the grid, and those responsible for substation capacity in the distribution system. These formerly isolated activities can be coordinated with the near-real-time usage information pouring in from the smart meters.

[For more InformationWeek Elite 100 coverage and a complete listing of the top 100 companies, click here.]

Peak demand at substations is the bane of the utility business. When the demand arrives, PG&E must have the power available. Each department found that "you can look at the business challenge differently if you can look at that data," says Steve Malnight, VP of customer energy solutions.

Brian Rich, VP of business technology at PG&E, and his team took up the challenge of identifying those customers contributing the most to peak demand. Perhaps it's two heavy industries in a neighborhood. Or maybe demand shoots up in a residential neighborhood as soon as kids get home from school and turn on TVs and game consoles. Either way, PG&E has a long list of energy-conservation and efficiency incentives it can offer contributors to peak demand.

"Shaving peak demand" has been the holy grail of the utility industry for years, but without smart meters and Interval Data Analytics, executives lacked the ability to orchestrate their systems and manage consumer demand with enough precision to make a significant dent in it.

For example, PG&E can infer from the data on a hot day who's using air conditioning, which at one time was the cause of rolling brownouts in California. For a savings, some homeowners in the state now let PG&E install a switch on their air conditioners that dials down AC cycles as a peak approaches and restores them once it has passed, Malnight says.

PG&E also reports more usage data directly to consumers on the My Energy portion of its website. Customers must register to view the data, which includes a graph of each month's energy consumption, with a line comparing similar homes and one comparing efficient homes.

PG&E has added to its My Energy page a button that lets consumers download the data to their own spreadsheets with a single click. By 2015, customers will be able to send that data to a third party, such as Opower, which makes a conservation app.

Rich says the mere fact that this "mountain of data" suddenly became available to utility divisions posed a challenge. "Everyone who never had it before needed it to run their part of the business," he says.

Given the backdrop of those demonstrators in Marin County, Rich's team has figured out how to replicate the data, sort it, and make it available for analytics without identifiers in order to protect the privacy of PG&E customers.

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Charles Babcock is an editor-at-large for InformationWeek and author of Management Strategies for the Cloud Revolution, a McGraw-Hill book. He is the former editor-in-chief of Digital News, former software editor of Computerworld and former technology editor of Interactive ... View Full Bio

In a written submittal filed with the Massachusetts Department of Public Utilities, Northeast Utilities was highly critical of a proposed state plan that would require utilization of "advanced metering" or smart meters within the state of Massachusetts as part of an electrical grid modernization plan. In fact, the comments are quite remarkable in that they appear to reflect reality without undue political spin or bias. Let us hope that other utilities, public utility commissions, and politicians everywhere can soon come to similar unbiased conclusions that are based upon economic realities and reflect consumers' and societal best interests.

What is presented below is a summary of key points made by Northeast Utilities in its filing of January 17, 2014, with only slight editorial changes, for example, replacing the term "advanced metering infrastructure" with the term "smart meters."

Overall Perspective – No Rational Basis for Smart Meter Mandate

"There is no rational basis for ...mandated implementation of [smart meters]."

whether customers are willing and able to pay the price of this technology choice;

whether the functionality provided by the technology choice will be utilized by customers or is even sought by customers;

whether the imposition of significant costs ... for this technology conflicts with other policies encouraging ... increased penetration of distributed resources [like wind and solar];

whether investment in distribution upgrades needed to accommodate distributed energy resources [would be] a better investment of customer dollars given the relatively small incremental benefit afforded by [smart meters]; and

whether other issues such as market alternatives, time-varying rates, and cyber-security should be resolved before there can be any rational determination that this technology is a good choice for customers."

Smart Meters Are Not a Good Choice for Consumers

"The [smart meter] technology choice is made although there is no evidence that this is a good choice for customers. Conversely, there is ample evidence that this technology choice will be unduly costly for customers and that the objectives of grid modernization are achievable with technologies and strategies that rank substantially higher in terms of cost-effectiveness. For customers who will pay the price of this system, there is no rational basis for this technology choice."

"There is no evidence that customers are willing to pay for the limited incremental functionality gained through implementation of [smart meters]. In fact, there is evidence to the contrary. For example, industry studies show that only 46 percent of customers are aware of the concept of 'smart metering,' and of that percentage, 33 percent associate smart metering with complaints of meter inaccuracy, higher customer bills, invasion of privacy and health concerns. Many customers have a deep aversion to technology that links them to the 'grid' in a way that they perceive as an invasion of their privacy and/or detrimental to their health."

"[H]ome energy automation solutions like smart thermostats and appliances are advancing at a rapid pace and, in many cases, are leverage existing communications infrastructure such as broadband internet. Rather than duplicating these expenditures and predetermining that the preferred communication should be enabled through the ill-considered implementation of [smart meters], the Companies should be afforded the flexibility to design [grid modification plans] that leverage the expenditures for the benefit, not to the detriment, of customers."

Smart Meter Costs Can Not Be Justified

"There is no cost justification that can support the implementation of [smart meters]. As identified by Northeast Utilities, ... [a smart meter] roll-out is problematic due to the extraordinary cost associated with, at best, a modest increase in functionality."

"Northeast Utilities estimates, conservatively, that the price tag for a [smart meter] rollout, including the recovery of existing investment on the Companies' books would likely approach, and possibly exceed, $1 billion over the course of ... implementation – all of which is to be borne by customers who may or may not be interested in interacting with the distribution system at the level implicated by [smart meter] technology."

Smart Meters Are Not an Appropriate Technology Platform for Grid Modernization

Mandating smart meters "creates an intractable obstacle to grid modernization. The mandate precludes [utilities] from designing and implementing grid modernization plans that are best suited to customers and that mitigate the cost that customers will bear for progress."

"An Advanced Metering System is not a 'basic technology platform' for grid modernization and is not needed to realize 'all of the benefits of grid modernization.'"

"Meters do not reduce the number of outages; metering systems are not the only option for optimizing demand or reducing system and customer costs; and metering systems are not necessary to integrate distributed resources [such as wind or solar] or to improve workforce and asset management. Therefore, it is not correctthat advanced metering functionality is a 'basic technology platform' that must be in place before all of the benefits of grid modernization can be fully realized."

"Accordingly, not only is there a flaw in the ... premise that an advanced metering system is a 'basic technology platform' for grid modernization, but also the implementation of a costly, advanced metering system is at odds with policies designed to promote the growth of distributed energy resources."

"Immense, near-term investments in [smart meters] should not be mandatedwithout (1) methodical, valid analysis of the associated costs and benefits; and (2) the development of a plan to solve the detrimental impact of cost-shifting driven by the pervasive installation of distributed energy resources."

"It is also premature to assume that [smart meters] can provide for large-scale conservation voltage reduction ('CVR')."

Cyber-Security Issues Prevent Development of a Suitable Implementation Plan

"Without resolution of the [issues related to] cyber-security, it is not possible ... to develop a suitable [smart meter implementation plan]. [Smart meters] introduce a brand new portal into the Companies' information systems, significantly increasing the cyber-security risk. Currently, the only mandatory standard for electric distribution company cyber-security is the North American Electric Reliability Corporation Critical Infrastructure Protection ('NERCCIP'), which applies only to bulk power systems and not to the electric distribution systems and metering infrastructure..."

Smart Meter Technology May Soon Be Rendered Obsolete

"Last, but not least, there is little confidence that the incremental benefits of moving to a [smart meter] platform will be sufficient to warrant the cost. Given that the grid modernization technology sphere is a dynamic, rapidly evolving marketplace, it is also unclear whether the incremental benefits, if any, would begin accruing to customers prior to the implemented [smart meter technology] beingrendered obsolete. In any event, the cost remains unjustified by the benefits."

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